Correlation Between Biosynex and Crossject

Can any of the company-specific risk be diversified away by investing in both Biosynex and Crossject at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Biosynex and Crossject into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Biosynex and Crossject, you can compare the effects of market volatilities on Biosynex and Crossject and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Biosynex with a short position of Crossject. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biosynex and Crossject.

Diversification Opportunities for Biosynex and Crossject

0.75

Correlation Coefficient

Biosynex  Crossject

Poor diversification

The 3 months correlation between Biosynex and Crossject is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Biosynex and Crossject in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crossject and Biosynex is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Biosynex are associated (or correlated) with Crossject. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crossject has no effect on the direction of Biosynex i.e., Biosynex and Crossject go up and down completely randomly.

Pair Corralation between Biosynex and Crossject

Assuming the 90 days trading horizon Biosynex is expected to under-perform the Crossject. In addition to that, Biosynex is 1.58 times more volatile than Crossject. It trades about -0.32 of its total potential returns per unit of risk. Crossject is currently generating about -0.05 per unit of volatility. If you would invest  229.00  in Crossject on September 24, 2024 and sell it today you would lose (31.00) from holding Crossject or give up 13.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.48%
Values	Daily Returns

Biosynex  vs.  Crossject

Biosynex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biosynex has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Crossject

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crossject has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Biosynex and Crossject

The main advantage of trading using opposite Biosynex and Crossject positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biosynex position performs unexpectedly, Crossject can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Crossject will offset losses from the drop in Crossject's long position.

The idea behind Biosynex and Crossject pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.